SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of April, 2005
Commission File Number 1-10928
INTERTAPE POLMER GROUP INC.
110E Montee de Liesse, St. Laurent, Quebec, Canada, H4T 1N4
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F Form 40-F X
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): __________
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): __________
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-______
The Information contained in this Report is incorporated by reference into
Registration Statement No. 333-109944
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INTERTAPE POLYMER GROUP INC.
Date: May 4, 2005 By: /s/H. Dale McSween
H. Dale McSween,
President - Distribution Products
INTERTAPE POLYMER GROUP INC.
MANAGEMENT PROXY CIRCULAR
IN CONNECTION WITH
THE ANNUAL MEETING
OF SHAREHOLDERS
to be held on
May 25, 2005
[LOGO] intertape polymer group(TM)
INTERTAPE POLYMER GROUP INC.
NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting (the "Meeting") of Shareholders
of INTERTAPE POLYMER GROUP INC. (the "Corporation") will be held at the
Fairmount Queen Elizabeth Hotel, 900 Rene-Levesque Blvd. West, Montreal,
Quebec, H3B 4A5, on May 25, 2005, at 4:00 o'clock in the afternoon, for the
purposes of:
(1) receiving the consolidated financial statements for the year ended
December 31, 2004, together with the auditors' report thereon;
(2) electing a board of eight directors to serve until the next annual
meeting of shareholders;
(3) appointing auditors and authorizing the directors to fix their
remuneration; and
(4) transacting such other business as may properly be brought before
the Meeting.
The specific details of all matters proposed to be put before the Meeting are
set forth in the accompanying Management Proxy Circular.
Only holders of record of common shares of the Corporation at the close of
business on April 25, 2005 will be entitled to vote at the Meeting.
By Order of the Board of Directors,
(signed) ANDREW M. ARCHIBALD, C.A.
Chief Financial Officer and Secretary
Montreal, Quebec - April 25, 2005
SHAREHOLDERS WHO ARE UNABLE TO BE PRESENT AT THE MEETING ARE REQUESTED TO
COMPLETE AND RETURN THE ENCLOSED FORM OF PROXY IN THE ENVELOPE PROVIDED FOR
THAT PURPOSE. PROXIES MUST BE RECEIVED AT THE REGISTERED OFFICE OF THE
TRANSFER AGENT OF THE CORPORATION NOT LESS THAN 48 HOURS PRIOR TO THE
MEETING.
MANAGEMENT PROXY CIRCULAR
Solicitation of Proxies
This Management Proxy Circular (the "Circular"), which is being
mailed to shareholders on or about April 29, 2005, is furnished in
connection with the solicitation by the management of Intertape Polymer
Group Inc. (the "Corporation") of proxies to be used at the Annual
Meeting of Shareholders of the Corporation (the "Meeting") to be held
on May 25, 2005 at the time and place and for the purposes set forth
in the accompanying notice of Annual Meeting of Shareholders, or any
adjournment thereof. The solicitation will be primarily by mail but
may also be made by telephone or other means of telecommunication
by regular employees of the Corporation at nominal cost. The cost
of the solicitation will be borne by the Corporation.
All dollar amounts set forth in this Circular are in U.S. dollars,
except as otherwise indicated.
Appointment of Proxyholders and Revocation of Proxies
A shareholder may appoint as proxyholder a person other than the
directors of the Corporation named in the accompanying form of proxy
to attend and vote at the Meeting in his stead, and may do so by
inserting the name of such other person, who need not be a
shareholder, in the blank space provided in the form of proxy or
by completing another proper form of proxy.
In order for proxies to be recognized at the Meeting, the completed
forms of proxy must be received at the office of the Corporation's
Canadian transfer agent, CIBC Mellon Trust Company, 2001
University Street, 16th Floor, Montreal, Quebec H2L 3A6, not less
than 48 hours prior to the Meeting.
A shareholder, or his attorney authorized in writing, who executed
a form of proxy may revoke it in any manner permitted by law,
including the depositing of an instrument of revocation in writing
at the principal place of business of the Corporation, 110E Montee
de Liesse, Montreal, Quebec H4T 1N4, at any time up to and
including the last business day preceding the day of the Meeting
or an adjournment thereof or with the Chairman of the Meeting or
an adjournment thereof on the day of the Meeting but prior to the
use of the proxy at the Meeting.
Non-Registered Holders
The information set forth in this section is important to the many
shareholders who do not hold their common shares of the
Corporation in their own names (the "Non-Registered Holders").
Non-Registered Holders should note that only proxies deposited
by shareholders whose names appear on the records of the
Corporation as the registered holders of shares can be recognized
and acted upon at the Meeting. However, in many cases, common
shares of the Corporation beneficially owned by a Non-Registered
Holder are registered either:
a) in the name of an intermediary (an "Intermediary") that the Non-
Registered Holder deals with in respect of the common shares, such as,
among others, banks, trust companies, securities dealers or brokers
and trustees or administrators of self-administered RRSPs, RRIFs,
RESPs and similar plans; or
b) in the name of a clearing agency (such as The Canadian Depository
for Securities Limited or "CSD") of which the Intermediary is a
participant.
In accordance with the requirements of National Instrument Policy 54-101
of the Canadian Securities Administrators, the Corporation has distributed
copies of the Notice of Meeting, this Management Proxy Circular, the form of
proxy and the 2004 Annual Report including management's discussion and
analysis (collectively, the "Meeting Materials") to the clearing agencies
and Intermediaries for onward distribution to Non-Registered Holders.
Intermediaries are required to forward the Meeting Materials to Non-
Registered Holders unless a Non-Registered Holder has waived the right to
receive them. Very often, Intermediaries will use service companies to
forward the Meeting Materials to Non-Registered Holders. Generally, Non-
Registered Holders who have not waived the right to receive the Meeting
Materials will either:
1. be given a proxy which is signed by the Intermediary (typically by
a facsimile, stamped signature) and already sets forth the number of common
shares beneficially owned by the Non-Registered Holder but which is
otherwise uncompleted. This form of proxy need not be signed by the Non-
Registered Holder. The Non-Registered Holder who wishes to submit a proxy
should properly complete the form of proxy and deposit it with CIBC Mellon
Trust Company as described above;
2. more typically, be given a voting instruction form which must be
completed and signed by the Non-Registered Holder in accordance with the
directions on the CIBC Mellon Trust Company voting instruction form.
The majority of brokers now delegate responsibility for obtaining
instructions from clients to ADP Investor Communications Corporation ("ADP"
formerly IICC). ADP typically mails a proxy form to the Non-Registered
Holders and asks Non-Registered Holders to return the proxy form to ADP
(the ADP form also allows completion of the voting instructions form by
telephone.) ADP then tabulates the results of all instructions received and
provides appropriate instructions respecting the voting of shares to be
represented at a shareholders' meeting. A Non-Registered Holder receiving a
proxy form from ADP cannot use that proxy to vote shares directly at the
Meeting. The proxy must be returned to ADP well in advance of the Meeting
in order to have the shares voted.
Shares held by brokers or their agents or nominees can he voted for or
against resolutions only upon the instructions of the Non-Registered
Holder. Without specific instructions, brokers and their agents and nominees
are prohibited from voting shares for the broker's clients. The purpose of
these procedures is to permit Non-Registered Holders to direct the voting
of the common shares they beneficially own.
Should a Non-Registered Holder who receives either a proxy or a voting
instruction form wish to attend and vote at the Meeting in person (or have
another person attend and vote on behalf of the Non-Registered Holder), the
Non-Registered Holder should strike out the names of the persons named in
the proxy and insert the Non-Registered Holder's (or such other person's)
name in the blank space provided, or, in the case of a voting instruction
form, follow the corresponding directions on the form. In either case, Non-
Registered Holders should carefully follow the instructions of their
Intermediaries and their service companies and ensure that instructions
respecting the voting of their shares are communicated to the appropriate
person.
Exercise of Discretion by Proxyholders
The persons whose names are printed on the accompanying form of proxy
will, on a show of hands or any ballot that may be called for, vote or
withhold from voting the shares in respect of which they are appointed in
accordance with the direction of the shareholder appointing them. If no
choice is specified by the shareholder, the shares will be voted for the
election of the nominees for directors set forth in this Circular under
the heading "Election of Directors" and for the appointment of the auditors
set forth in this Circular under the heading "Appointment and Remuneration
of Auditors".
The enclosed form of proxy confers discretionary authority upon the
persons named therein with respect to amendments or variations to matters
identified in the notice of the Meeting and to other matters which may
properly come before the Meeting. As at the date hereof, management knows
of no such amendment, variation or other matters to come before the
Meeting. If any matters which are not now known should properly come before
the Meeting, the persons named in the form of proxy will vote on such
matters in accordance with their best judgment.
Shareholder Proposals for the 2006 Annual Meeting
Shareholder proposals intended to be presented at the Corporation's
2006 Annual Meeting of Shareholders must be submitted for inclusion in
the Corporation's proxy materials prior to March 1, 2006.
Voting Shares and Principal Holders Thereof
As at April 25, 2005, the Corporation had 41,237,711 common shares
outstanding, being the only class of shares entitled to be voted at the
Meeting. Each holder of such shares is entitled to one vote for each share
registered in his name as at the close of business on April 25, 2005,
being the date fixed by the Board of Directors of the Corporation or the
determination of the registered holders of such shares who are entitled to
receive the Notice of Annual Meeting of Shareholders enclosed herewith
(the "Record Date"). In the event that such a shareholder transfers the
ownership of any of his shares after the Record Date, the transferee of
such shares shall be entitled to vote at the Meeting if he produces
properly endorsed share certificates or otherwise establishes proof of his
ownership of the shares and demands, not later than ten days before the
Meeting, that his name be included in the list of shareholders entitled
to vote. This list of shareholders will be available for inspection on and
after the Record Date during usual business hours at the registered office
of the Corporation and at the Meeting.
Based on public filings made by the persons mentioned in this
paragraph with the United States Securities and Exchange Commission, Letko,
Brosseau & Associates Inc. beneficially owned, as of February 15, 2005,
4,752,490 (11.5%) of the Corporation's common shares, and, as of February
22, 2005, Wells Fargo & Company and its subsidiaries beneficially owned,
directly or indirectly, 4,972,566 (12.1%) of the Corporation's common
shares, the foregoing persons being the only persons that, to the knowledge
of the directors and officers of the Corporation, beneficially own or
exercise control or direction over shares carrying approximately ten percent
or more of the voting rights attached to all shares of the Corporation.
Election of Directors
The Articles of the Corporation stipulate that the Board of Directors
shall consist of a minimum of one and a maximum of eleven directors. The
entire Board of Directors currently consists of seven members all of whom
were members of the Board prior to the last annual shareholders meeting
held on June 2, 2004. J. Spencer Lanthier, who has been a director of the
Corporation since June 20, 2001, has notified the Corporation that he will
not seek re-election and thus he will cease being a member of the Board
immediately following the Meeting. The Nominating & Governance Committee
of the Corporation has recommended that Mr. John E. Richardson and Mr.
Jorge N. Quintas, each of whose biographical information is set out below,
be nominated for election to the Board and management of the Corporation
has agreed to act on such recommendation. The following sets out information
regarding each of the eight persons proposed by management as nominees for
election as directors to hold office until the next succeeding annual
meeting of shareholders of the Corporation or until their successors are
elected or appointed.
As at April 25, 2005
Control or Direction of the
Corporation is Exercised by
Means of (1)
____________________________
Name Age Position or office Common Options to
with Corporation Director Since Shares Purchase Shares
Melbourne F. Yull(4) 64 Director, Chairman of the December 22, 1989(5) 545,527 1,079,000
Board and Chief Executive
Officer
Michael L. Richards(2)(4) 66 Director December 22, 1989(5) 77,600 51,000
Ben J. Davenport, Jr.(2)(4) 62 Director June 8, 1994 19,000 51,000
L. Robbie Shaw(2)(3)(4) 63 Director June 8, 1994 7,500 48,500
Gordon R. Cunningham(2)(3)(4) 60 Director May 21, 1998 14,500 39,000
Thomas E. Costello(3)(4) 65 Director November 22, 2002 4,000 27,500
John E. Richardson 71 Nominee for election as a Nominee for election
Director as a Director 0 0
Jorge N. Quintas 58 Nominee for election as a Nominee for election
Director as a Director 0 0
_______ _________
668,127 1,296,000
_______ _________
_______ _________
__________
(1) This information, not being within the knowledge of the Corporation,
was furnished by the respective nominees individually.
(2) Member of Compensation Committee.
(3) Member of Audit Committee.
(4) Member of Nominating & Govemance Committee.
(5) Director of the predecessor company since 1981.
Melbourne F. Yull, a resident of Sarasota, Florida was appointed
Chairman of the Board and Chief Executive Officer on January 11, 1995,
having been the President and a director of the Corporation or a predecessor
thereof since 1981.
Michael L. Richards, a resident of Westmount, Quebec, is a senior
partner in the law firm Stikeman Elliott LLP, Montreal, Quebec. He is
also a director of Novamerican Steel Inc.
Ben J. Davenport, Jr., a resident of Chatham, Virginia, is the Chief
Executive Officer of Chatham Oil Company, a distributor of oil, gasoline
and propane. He also serves as Chairman and Chief Executive Officer of
First Piedmont Corporation, a waste hauling business.
L. Robbie Shaw, a resident of Halifax, Nova Scotia, is the former
Vice-President of Nova Scotia Community College and currently acts as a
consultant for the College.
Gordon R. Cunningham, a resident of Toronto, Ontario, is President of
Cumberland Asset Management Corp., a discretionary investment management
firm.
Thomas E. Costello, a resident of Longboat Key, Florida, was the Chief
Executive Officer, from 1991 to 2002, of xpedx, a wholly-owned subsidiary
of the International Paper Company.
John E. Richardson, a resident of Toronto, Ontario, is currently the
Chairman of the Ontario Pension Board, the Chairman of the Boiler
Inspection and Insurance Company of Canada, as well as a director of
Research in Motion (and their audit committee financial expert) and Armtec
Limited Income Trust (and a member of their audit committee). He had
previously served as the Deputy Chairman of London Insurance Group Inc.,
Chairman, President, and CEO of Wellington Insurance Co. and President of
Great Lakes Power, and, prior to that, he had been a senior partner of
Clarkson Gordon & Co. (now Ernst & Young).
Jorge N. Quintas, a resident of Porto, Portugal, is currently the
President and a director of Fibope Portuguesa-Filmes Biorientados S.A., a
wholly-owned subsidiary of the Corporation that is located in Portugal and
that manufactures and distributes shrink films. Mr. Quintas has and
continues to serve in executive capacities and/or as a director of various
other corporations most of which are based in Portugal, including as
President of Nelson Quintas & Filhos (Holding), which owns interests in
five cable manufacturing facilities (three of which are located in Portugal,
one in Brazil and one in Spain), as Vice-President of Cabelte Holding and
as a board member of Portgas. The corporations with which Mr. Quintas serves
as an executive are involved in a range of industrial activities, including
the distribution and/or manufacture of natural gaz, energy and
telecommunications cables, fiber-optic cables, cables for the automotive
industry and other types of cables.
If any of the above nominees is for any reason unavailable to serve as
a director, proxies in favour of management will be voted for another
nominee in the discretion of the persons named in the form of proxy unless
the shareholder has specified in the proxy that his shares are to be
withheld from voting on the election of directors. The Board of Directors
recommends a vote in favour of each of the nominees.
Executive Compensation
1. Summary Compensation Table
The following table sets forth all compensation paid in respect of the
individuals who were, at December 31, 2004, the Chief Executive Officer and
the other four most highly compensated executive officers of the Corporation
(the "named executive officers").
SUMMARY COMPENSATION TABLE
Long-Term
Compensation
Awards
Securities Under
Other Annual Options Granted
Salary Bonus Compensation As At FY-End
Name and Principal Position Year (in U.S. $) (in U.S. $) (in U.S. $)(1) (#)
___________________________ ____ ____________ ____________ ____________ ________________
M.F. Yull 2004 508,832 264,975 10,175 979,000
Chairman of the Board and 2003 490,346 30,000 35,645 879,000
Chief Executive Officer 2002 475,000 100,000 50,190 819,000
H.D. McSween 2004 329,932 171,002 1,964 320,165
Executive Vice President, 2003 309,197 15,000 12,683 280,165
Operations 2002 299,520 25,000 13,649 285,165
A.M. Archibald 2004 275,983 148,960 2,668 279,543
Chief Financial Officer 2003 268,400 12,500 2,240 239,543
and Secretary 2002 238,796 0 585 244,543
J.B. Carpenter 2004 240,825 125,626 1,166 190,000
Executive Vice President, 2003 225,456 10,000 13,713 120,000
Global Sourcing 2002 218,400 15,000 14,950 90,000
D.R. Yull 2004 240,780 125,600 1,958 255,300
Executive Vice President, 2003 224,000 10,000 18,220 189,800
Strategic Planning and 2002 193,558 15,000 21,063 159,800
International Business
__________
(1) The amounts in this column relate primarily to taxable benefits on
employee loans, to the Corporation's contributions to the pension plan
and to expenses incurred by the Corporation in connection with
automobiles that it puts at the disposal of certain of the named
executive officers.
The aggregate compensation for all executive officers and directors of
the Corporation who are not "named executive officers" for the fiscal year
ended December 31, 2004 amounts to U.S.$1,544,036.
2. Executive Stock Option Plan
In 1992, the Corporation established its ongoing Executive Stock Option
Plan (the "Plan") in respect of the common shares of the Corporation, such
Plan which has been amended from time to time. The Plan is administered by
the Board of Directors. The shares offered under the Plan are common shares
of the Corporation. The Plan may be amended by the Board of Directors
subject to obtaining any prescribed regulatory approvals and, when
applicable, shareholder approval.
The purpose of the Plan is to promote a proprietary interest in the
Corporation among the executives, the key employees and the non-management
directors of the Corporation and its subsidiaries, in order to both
encourage such persons to further the development of the Corporation and
to assist the Corporation in attracting and retaining key personnel
necessary for the Corporation's long term success. The Board of Directors
designates from time to time from the eligible executives those executives
to whom options are to be granted and determines the number of shares
covered by such options. Generally, participation in the Plan is limited
to persons holding positions that can have an impact on the Corporation's
long-term results. The rights of an optionee under the Plan are non-
assignable. When an optionee ceases to be an employee of the Corporation
or one of its subsidiaries, the optionee has three months within which to
exercise vested options (twelve months in the case of retirement or death).
When a director of the Corporation ceases to be a director, he or she has
three months within which to exercise vested options. Non-vested options
are cancelled immediately in the above circumstances.
The number of common shares to which the options relate are determined
by taking into account, inter alia, the market price of the common shares
and each optionee's base salary. The Plan provides that the number of
common shares of the Corporation reserved for issuance to any one person
shall not exceed five percent of the issued and outstanding common shares
of the Corporation. The exercise price payable for each common share
covered by an option is determined by the Board of Directors but will not be
less than the market value of the underlying common shares on the day
preceding the effective date of the grant. The Plan provides that options
issued thereunder shall vest at the rate of 25% per year, beginning, in the
case of options granted to employees, on the first anniversary date of the
grant and, in the case of options granted to non-management directors, on
the date of the grant. The maximum number of common shares that may be
issued under the Plan is 4,094,538 (representing 9.9% of the total number of
common shares of the Corporation that are currently outstanding). As at
December 31, 2004, there were a total of 3,772,155 (9.1%) outstanding options
issued under the Plan, each of such options which, if or when vested, will
be exercisable for one common share of the Corporation, and the weighted-
average exercise price of such outstanding options equaled U.S.$9.37. As at
December 31, 2004, 322,383 (less than 1%) more options remained available for
issue under the Plan, such options which may be issued to insiders or non-
insiders of the Corporation.
The following table sets forth each grant of options to the named
executive officers under the Plan in 2004.
OPTION GRANTS DURING THE FINANCIAL YEAR ENDED DECEMBER 31, 2004
% of the Total
Number of Options
That Were Granted
Securities To Employees
Under During the Market Value of the
Options Financial Year Exercise Price Common Shares on
Granted ended Dec. 31, ($/Common The Date of Grant
Name (#) 2004 Share) ($/Common Share) Expiration Date
______________ __________ ________________ ______________ ____________________ _______________
M.F. Yull 100,000 11.4% 10.87 10.87 February 23, 2010
62,000 7.1% 7.36 7.36 October 29, 2010
H.D. McSween 40,000 4.6% 10.87 10.87 February 23, 2010
A.M. Archibald 40,000 4.6% 10.87 10.87 February 23, 2010
J.B. Carpenter 30,000 3.4% 10.87 10.87 February 23, 2010
40,000 4.6% 7.36 7.36 October 29, 2010
D.R. Yull 30,000 3.4% 10.87 10.87 February 23, 2010
40,000 4.6% 7.36 7.36 October 29, 2010
The following table sets forth details regarding the exercise of
options by named executive officers in 2004.
AGGREGATED OPTION EXERCISES DURING THE FINANCIAL YEAR ENDED
DECEMBER 31, 2004 AND FINANCIAL YEAR-END OPTION VALUES
Value of
Unexercised Unexercised
Securities Aggregate Options Options
Acquired Value at FY-End at FY-End
on Exercise Realized (#) (U.S.$)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
_______________ ___________ ____________ _________________________ _________________________
M.F. Yull 0 0 669,500/309,500 7,241,850/2,684,420
H.D. McSween 0 0 195,165/125,000 1,623,194/1,054,263
A.M. Archibald 0 0 174,043/105,500 1,441,428/875,673
J.B. Carpenter 0 0 67,500/122,500 585,000/1,034,775
D.R. Yull 4,500 17,550 120,300/135,000 1,175,472/889,375
3. Pension Arrangements
The Corporation maintains a defined contribution plan through its
Canadian subsidiary, Intertape Polymer Inc. ("IPI"), for its salaried
employees in Canada. The Corporation maintains three defined benefit plans
in the United States (two hourly and one salaried). Benefits for salaried
employees are based on compensation and years of service and benefits for
hourly employees are based on a fixed schedule of benefits per month for
each year of service for such employees. In Canada, certain non-union hourly
employees of the Corporation are covered by a defined benefit plan which
provides a fixed benefit of U.S.$14.60 in 2004 (U.S.$12.81 and U.S.$10.83
in 2003 and 2002, respectively) per month for each year of service. None of
the Corporation's named executive officers receive or have received benefits
under the defined benefit plans described above. The Corporation's pension
arrangements with M.F. Yull are described in the following section of this
Circular.
In 2005, the Corporation entered into a defined benefit retirement
agreement with H.D. McSween whereby the Corporation agreed to fund a
U.S.$150,000 per year pension (at age 65) for Mr. McSween with a 50%
survivor benefit (or, in the case of death prior to age 65, a survivor
benefit of 100% of base salary for one year, and 50% of base salary for
each of the following four years).
Effective January 1, 2001, the Corporation amended and restated its
USA Employees' Retirement Plan to be a combined employee stock ownership
plan and 401(k) plan, to change the name of the plan to the "Intertape
Polymer Group Inc. USA Employees' Stock Ownership and Retirement Savings
Plan" and to bring the plan into compliance with recent legislative changes.
The Corporation may make annual discretionary matching contributions equal
to a percentage of the contributions made by employees, but in no event
shall such contributions exceed six percent of the employee's compensation
deposited as elective contributions. The Corporation's expense for such
retirement savings plans for the year ended December 31, 2004, was
U.S.$850,000 (U.S.$2,446,000 in 2003 and U.S.$2,585,000 in 2002). In the
United States, the Corporation also provides group health care and life
insurance benefits to certain retirees. A subsidiary of the Corporation
contributes to a multi-employer plan for employees covered by collective
bargaining agreements.
4. Executive Employment Contracts and Termination of Employment
of Executives
The Corporation entered into a new employment agreement with M.F. Yull
on January 1, 2004. Pursuant to the terms of the employment agreement (the
"Agreement"), M.F. Yull continued to serve as Chairman of the Board and
Chief Executive Officer of the Corporation and its subsidiaries. His annual
gross salary for the year 2004 was U.S.$508,832. His compensation level is
reviewed annually by the Corporation in accordance with its intemal
policies. M.F. Yull's fixed annual gross salary for the year 2005 was set
at U.S.$548,500. The Agreement provides, inter alia, for annual bonuses
based on the budgeted objectives of the Corporation.
The Agreement also provides for the payment of 36 months of M.F. Yull's
remuneration in the event of termination without cause or resignation within
six months of a change of control of the Corporation. Further, it provides
for all options for the acquisition of common shares of the Corporation
previously granted to M.F. Yull to become immediately vested and exercisable
in the event of his termination without cause, or his resignation within
twelve months of a change of control of the Corporation, or his retirement
at any time after his 60th birthday or in the event of his death. In
addition to his participation in the pension plan of IPI, the Agreement
provides that M.F. Yull will receive, upon his ceasing to be an employee
for any reason, a defined benefit supplementary pension annually for life
equal to two percent of his average annual gross salary for the final five
years of his employment as CEO multiplied by his years of service with the
Corporation, including all time served as Chairman beyond time served as CEO.
Furthermore, the Agreement provides that if during the term of M.F.
Yull's employment a bona fide offer is made to all shareholders of the
Corporation which, if accepted, would result in a change of control of the
Corporation, then, subject to any applicable law, all of M.F. Yull's
options which have not yet become vested and exercisable shall become vested
and exercisable immediately. Upon expiry of such bona fide offer, if it
does not result in a change of control of the Corporation, all of M.F.
Yull's unexercised options which were not vested prior to such offer, shall
immediately revert to their unvested status and to their former provisions
with respect to the time of their vesting.
The Corporation has also entered into agreements as of January 2001
with each of Messrs. A.M. Archibald, W.A. Barnes, J.B. Carpenter, B.H.
Hildreth, J.A. Jackson, G.C. Jones, H.D. McSween, S. Nelson, E. Nugent,
K.R. Rogers, D.R. Yull and G.A. Yull, and, as of January 2004 with V.
DiTommaso and, as of February 2004, with P. Greco and M.J. Dougherty and,
as of October 2004, with Kevin Jewell, Mike Young, Doug Nalette, Roy Van
Essendelft, Shane Betts and Brian Martin. These agreements provide that
if, within a period of six months after a change in control of the
Corporation, (a) the executive voluntarily terminates his employment with
the Corporation, or (b) the Corporation terminates the executive's
employment without cause, such executive will be entitled to a lump sum
in the case of his resignation or an indemnity in lieu of notice in a
lump sum in the case of his termination, equal to 12 to 24 months of such
executive's remuneration at the effective date of such resignation or
termination, depending on his seniority.
In addition, all options for the acquisition of common shares of the
Corporation previously granted to such executive shall become immediately
vested and exercisable. Furthermore, these agreements also provide that if
during the term of the executive's employment a bona fide offer is made to
all shareholders of the Corporation which, if accepted, would result in a
change of control of the Corporation, then, subject to any applicable law,
all of the executive's options which have not yet become vested and
exercisable shall become vested and exercisable immediately. Upon expiry
of such bona fide offer, if it does not result in a change of control of
the Corporation, all of the executive's unexercised options which were not
vested prior to such offer, shall immediately revert to their unvested
status and to their former provisions with respect to the time of their
vesting.
5. Composition of Compensation Committee and Report on Executive
Compensation
The Compensation Committee (the "Committee") is appointed by the Board
of Directors and is composed of four directors, being Ben J. Davenport,
Jr., Michael L. Richards, L. Robbie Shaw and Gordon R. Cunningham, none of
whom are or have been at any previous time an employee of the Corporation
or any of its subsidiaries.
The Committee administers the Corporation's compensation program in
accordance with the mandate set out in the Committee's charter, which has
been adopted by the Board of Directors. Part of the mandate is to evaluate
and recommend to the Board compensation policies and programs for the
Corporation's directors, executive officers and senior management, including
option grants under the Corporation's Executive Stock Option Plan described
above. The Committee has the authority to retain compensation consultants to
assist in the evaluation of director. chief executive officer or senior
executive compensation.
The Committee annually reviews the compensation levels for the CEO and
other executive officers and certain members of senior management. The
Committee also reviews information it receives from the Corporation's CEO
as well as from external compensation consultants. It uses this information
to determine and approve such changes to the general compensation levels
that it considers appropriate. In addition, on the recommendation of the
CEO, the Committee approves and recommends to the Board of Directors
discretionary cash bonuses, annual bonuses and stock option awards for
executive officers and senior management. In arriving at its decisions,
the Committee reviews industry comparisons for similar sized companies and
for other companies in the packaging materials sector.
Three primary components comprise the Corporation's compensation
program: basic salary, annual bonuses based on performance and long-term
stock options. Each element of compensation fulfils a different role in
the attraction, retention and motivation of qualified executives and
employees with the expertise and skills required in the business of the
Corporation, who can effectively contribute to the long-term success and
objectives of the Corporation. The annual bonus program is both formula
based, measured against pre-determined performance targets, and
discretionary. Stock options are granted to executives and key employees
periodically by the Board of Directors based on the recommendations of
the Committee. The amount and terms of outstanding options are taken into
account when determining whether and how many new options will be granted.
The options vest at a rate of 25% per year, beginning, in the case of
options granted to employees, on the first anniversary date of the grant
and, in the case of options granted to non-management directors, on the
date of the grant. The options have no resulting value if the stock market
price of the Corporation's shares does not appreciate.
The Committee annually reviews and approves the corporate goals and
objectives relevant to the CEO's compensation, evaluates the CEO's
performance in light of those goals and objectives and recommends to the
Board the CEO's compensation level based on this evaluation. The Committee
considers the Corporation's performance and relative shareholder return
and the awards given to the CEO in past years in determining the long-term
component of his compensation. Based on these recommendations, the Board
fixes the CEO's compensation. The CEO does not participate in the
Committee's or the Board's deliberations concerning his compensation.
Directors who are not officers or employees of the Corporation receive
both cash compensation and options based on the recommendations of the
Committee following its review of compensation arrangements for directors
of public companies with comparable market capitalization.
The above report has been submitted to and approved by the current
members of the Committee, being Ben J. Davenport, Jr., Michael L. Richards,
L. Robbie Shaw and Gordon R. Cunningham.
Compensation of Directors
In 2004, directors of the Corporation, who were not officers of the
Corporation, received an annual fee of U.S.$11,500 for their services as
directors and a fee of U.S.$900 for each board meeting attended (U.S.$450
for telephone meetings). Furthermore, a total of 45,000 options to purchase
common shares of the Corporation were granted to directors of the
Corporation who were not officers of the Corporation. All of those options
were granted at an exercise price of U.S.$10.87.
Minimum Stock Ownership Requirements for Directors and Officers
Upon recommendations made by the Corporation's Compensation Committee,
in the first quarter of 2004, the Board of Directors passed resolutions
implementing a policy whereby the officers and directors of the Corporation
will be required to maintain ownership of a designated amount of common
shares of the Corporation. Set out in the paragraphs below is a summary
of such policy.
The Chief Executive Officer of the Corporation is required to own that
number of common shares that has a value that is equal to eight times his
or her base salary(1). Senior executive officers of the Corporation are
required to own that number of common shares that has a value that is equal
to three times their respective base salaries. All other executive officers
of the Corporation are required to own that number of common shares that
has a value that is equal to their respective base salaries. Directors
______________________
(1) The targets mentioned in these paragraphs are based on the salary levels
and the market price of the Corporation's common shares as of January 2004.
Adjustments will be made, as applicable in accordance with the policy, upon
the appointment of a new director or officer or upon the promotion of an
officer.
of the Corporation are required to own that number of common shares that
has a value that is equal to the aggregate of five times the total of the
annual base retainer fees paid to such directors plus the meeting fees paid
to such directors for the four regular quarterly meetings of the Board of
Directors.
Directors and officers of the Corporation have four years from January
2004 to attain the foregoing common share ownership levels. Until such stock
ownership levels have been achieved, a specific officer or director must
maintain 75% of all common shares that they have received through the
exercise of any options that had been granted to them by the Corporation
and they must thereafter maintain 25% of all common shares that they have
received through the exercise of any options. Failure to attain the
required ownership levels within the prescribed time period will call for
the holding of one-half of future incentive payments (or directors fees)
to be made to such individual until the required ownership level is
obtained. Directors and officers may apply to the Corporation's Compensation
Committee in order to obtain a waiver from the application of all or a
portion of the foregoing policy. The Compensation Committee may recommend
that the Board of Directors grant a waiver to a particular director or
officer on a case by case basis (the Compensation Committee will consider
a specific individual's estate planning needs, necessity to purchase a
primary residence, education expenses, charitable contributions and/or
other demonstrations of hardship (e.g. illness or divorce)).
Indebtedness of Directors and Officers
As listed in the table below, certain officers of the Corporation are
currently indebted to the Corporation in respect of interest-free loans
that are payable on demand by the Corporation. All such loans were
entered into prior to the application to the Corporation of the relevant
provisions of the Sarbanes-Oxley Act of 2002. As at April 25, 2005, the
aggregate indebtedness of all directors, executive officers and senior
officers to the Corporation entered into in connection with such loans
was Cdn$606,634 and U.S.$411,128. The following table summarizes the
largest amount of such loans outstanding during the year ended December
31, 2004 and the amount outstanding as at April 25, 2005.
TABLE OF INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS
Largest Amount
Oustanding Amount
Involvement of the During FY-Ended Outstanding as
Corporation or its Dec. 31, 2004 at April 25, 2005
Name and Principal Position subsidiaries ($) ($)
___________________________ _____________________________ _______________ _________________
M.F. Yull The Corporation is the Lender U.S.$216,398 U.S.$216,398
Chairman of the Board, Cdn $415,277 Cdn $415,277
Chief Executive Officer
and a Director
G.A. Yull The Corporation is the Lender U.S.$125,000 U.S.$117,500
President, Distribution
Products
A.M. Archibald The Corporation is the Lender Cdn $160,255 Cdn $160,255
Chief Financial Officer
and Secretary
D.R. Yull - The Corporation is the Lender U.S.$ 59,730 U.S.$ 59,730
Executive Vice President
Strategic Planning and
International Business
H.D. McSween The Corporation is the Lender Cdn $ 31,102 Cdn $ 31,102
Executive Vice President,
Operations
J. Jackson The Corporation is the Lender U.S.$ 10,000 U.S.$ 10,000
Vice President, Chief
Information Officer
Directors' and Officers' Insurance
The Corporation maintains directors' and officers' liability
insurance covering liability, including defense costs, of
directors and officers of the Corporation incurred as a result of
acting as such directors or officers, provided they acted honestly
and in good faith with a view to the best interests of the
Corporation. The current limit of insurance is U.S.$25,000,000 and
an annual premium of U.S.$350,000 was paid by the Corporation in
the last completed financial year with respect to the period from
December 2004 to December 2005. Claims payable to the Corporation
are subject to a retention of up to U.S.$1,000,000 per occurrence.
Performance Graph
The following graphs illustrate changes over the past five
year period in cumulative total shareholder return over the five-
year period on the Corporation's common shares with the cumulative
shareholder returns on the S&P/TSX Total Return Index (1st graph
below) and on the S&P 500 (2nd graph below), assuming
reinvestment of all dividends.
FIVE-YEAR TOTAL RETURN ON $100 INVESTMENT (DIVIDENDS REINVESTED)
(Based on the Corporation's activity on The Toronto Stock Exchange)
[GRAPH]
Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31
1999 2000 2001 2002 2003 2004
- Intertape $100.00 $ 27.44 $32.07 $15.59 $41.29 $ 27.17
- S&P/TSX $100.00 $106.18 $91.27 $78.61 $97.95 $109.23
FIVE-YEAR TOTAL RETURN ON $100 INVESTMENT (DIVIDENDS REINVESTED)
(Based on the Corporation's activity on The New York Stock Exchange)
[GRAPH]
Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31 Dec. 31
1999 2000 2001 2002 2003 2004
- Intertape $100.00 $26.26 $29.68 $14.52 $45.55 $32.56
- S&P/TSX $100.00 $89.86 $78.14 $59.88 $75.68 $82.49
Appointment and Remuneration of Auditors
Raymond Chabot Grant Thornton LLP, Chartered Accountants, who
have been the auditors of the Corporation since December 22, 1989
and the auditors of the predecessor company since 1981, have been
recommended by the Audit Committee and will be nominated for
appointment as the Corporation's auditors to hold office until the
next annual meeting of shareholders at such remuneration as may
be fixed by the Board of Directors. A majority of the votes of
the shareholders present or represented by proxy at the Meeting
is required for the approval of such matter. Representatives of
Raymond Chabot Grant Thornton LLP will be present at the Meeting
and will have an opportunity to make a statement if they desire
to do so. They will also be available to respond to appropriate
questions.
Interest of Management and Others in Material Transactions
The management of the Corporation is unaware of any interest
in any material transaction of the Corporation of any director
or officer of the Corporation, of any management nominee for
election as a director of the Corporation or of any person who
beneficially owns or exercises control or direction over shares
carrying more than ten percent of the voting rights attached to
all shares of the Corporation, or any associate or affiliate of
any such person, since the beginning of the last completed
financial year of the Corporation or in any proposed transactions
that has materially affected or will materially affect the
Corporation or any of its affiliates.
STATEMENT OF CORPORATE GOVERNANCE PRACTICES OF THE CORPORATION
In 1995, the Toronto Stock Exchange (the "TSX") adopted a requirement that
disclosure be made by each listed company of its corporate governance system by
making reference to the TSX Guidelines for Corporate Governance (the
"Guidelines") and each listed company is also required to explain where its
system of governance differs from the Guidelines.
More recently, regulators in both Canada and the United States have
brought forth new requirements in terms of corporate governance and
accountability in connection with public companies. Heightened expectations
on the part of investors and the public in general encouraged governments
and regulators in both countries to propose and adopt new rules in these
sectors and to revise and amend those rules that were already in effect.
The Corporation's Nominating & Governance Committee will continue to follow
the progress of these developments with a view to recommending to the Board
any changes to the Corporation's governance practices that may become
necessary in order that the Corporation complies with the aforementioned
requirements as they become effective.
The following is a statement of the Corporation's existing corporate
governance practices with specific reference to the Guidelines (as indicated
in bold below) currently in effect:
_____________________________________________________________________________
[BOLDED]
The board of directors of every corporation should explicitly assume
responsibility for the stewardship of the corporation and adopt a formal
mandate setting out the board's stewardship responsibilities, and as part of
the overall stewardship responsibility, the board should assume responsibility
for the following matters:
(a) adoption of a strategic planning process and the approval and review,
on at least an annual basis of a strategic plan;
(b) the identification of the principal risks of the corporation's
business and overseeing the implementation of appropriate systems
to manage these risks;
(c) succession planning, including appointing, training and monitoring
senior management;
(d) communications policies for the corporation; and
(e) the integrity of the corporation's internal control and management
information systems.
____________________________________________________________________________
All the directors that are presently in office and that are proposed to be
re-elected at the Meeting have served as directors in good standing of the
Corporation since 1994, other than Gordon R. Cunningham who was elected in 1998
and Thomas E. Costello who was elected on November 22, 2002. Further, John E.
Richardson and Jorge N. Quintas have been nominated this year for the first
time to serve as directors of the Corporation. Participation of directors is
expected at all Board of Directors and Committee meetings. Directors are asked
to notify the Corporation if they will be unable to attend and attendance at
meetings is duly recorded. All the directors have agreed to contribute to the
evaluation of their collective as well as their individual performances.
The mandate of the Board of Directors of the Corporation is to supervise
the management of the business and affairs of the Corporation, including the
development of major policy and strategy and the identification of the risks of
the Corporation's business and implementation of the appropriate systems to
manage these risks. The Board of Directors of the Corporation has explicitly
assumed responsibility for the stewardship of the Corporation and has adopted a
formal mandate setting out its stewardship responsibilities. Additionally,
the Corporation has adopted a Code of Conduct and Business Ethics that all
directors, management personnel and employees of the Corporation are expected
to adhere to.
All major decisions concerning, among other things, the Corporation's
corporate status, capital, debt financing, securities distributions,
investments, acquisitions, divestitures and strategic alliances, are subject
to approval by the Board of Directors. In particular, capital investments and
other outlays of an aggregate monetary amount of one million U.S. dollars or
more are subject to the prior approval of the Board of Directors.
The Board of Directors meets at least quarterly, and more frequently as
required to consider particular issues or conduct specific reviews between
quarterly meetings whenever appropriate. The Board of Directors periodically
invites senior operating management to attend meetings of the Board of
Directors to report on their business responsibilities. Governance
responsibilities are undertaken by the Board of Directors as a whole, with
certain specific responsibilities delegated to the Audit, the Compensation
and the Nominating & Governance Committees as described below. For example,
the Board of Directors has mandated the Compensation Committee and the
Nominating & Governance Committee to develop a succession planning strategy
for the Corporation which will include formalizing the Corporation's
procedures related to the appointing, training and monitoring of senior
management.
____________________________________________________________________________
[BOLDED]
The board of directors of every corporation should be constituted with a
majority of individuals who qualify as unrelated directors. If the corporation
has a significant shareholder, in addition to a majority of unrelated directors,
the board should include a number of directors who do not have interests in or
relationships with either the corporation or the significant shareholder and
which fairly reflects the investment in the corporation by shareholders other
than the significant shareholder. The application of the definition of
"unrelated director" to the circumstances of each individual director should be
the responsibility of the board which will be required to disclose whether the
board has a majority of unrelated directors or, in the case of a corporation
with a significant shareholder, whether the board is constituted with the
appropriate number of directors which are not related to either the corporation
or the significant shareholder.
____________________________________________________________________________
The Corporation's Board of Directors currently consists of seven
directors, five of whom are unrelated directors in accordance with the
definition of an unrelated director in the Guidelines. Following the Meeting,
J. Spencer Lanthier will cease to be a director, and should John E. Richardson
and Jorge N. Quintas be elected as directors, the Corporation's Board of
Directors will consist of eight directors. John E. Richardson and Jorge N.
Quintas will be unrelated directors in accordance with the definition of an
unrelated director in the Guidelines. The Board of Directors has examined its
size and determined that eight directors, six of whom are unrelated, is an
appropriate number for continued effective decision-making for the Corporation.
The Board of Directors is currently chaired by M.F. Yull who is also the
Chief Executive Officer of the Corporation. The Board is of the view that this
does not impair its ability to act independently of management due, inter alia,
to the independence of the remaining members of the Board of Directors and due
to the role of the Board of Directors in determining its own policies,
procedures and practices, and ensuring that the appropriate information is
made available to the Board of Directors. Michael L. Richards is considered to
be a related director given that the law firm Stikeman Elliott LLP, of which
Mr. Richards is a senior partner, provides legal services to the Corporation
on a regular basis. The Corporation is of the view that its relationship with
Stikeman Elliott LLP does not inhibit Mr. Richards' ability to act
impartially, nor his ability to act independently of the views of management
of the Corporation.
The Corporation does not have a significant shareholder as described in
the Guidelines given that no shareholder of the Corporation has the ability to
exercise a majority of the votes for the election of the Corporation's Board
of Directors.
_____________________________________________________________________________
[BOLDED]
Committees of the board of directors should generally be composed solely of
non-management directors, a majority of whom are unrelated directors.
_____________________________________________________________________________
The Board of Directors has established three committees, the Audit
Committee, the Compensation Committee, and the Nominating & Governance
Committee to facilitate the carrying out of its duties and responsibilities
and to meet applicable statutory requirements. The Guidelines recommend that
the Audit Committee be made up of non-management and unrelated directors
only and that other board committees should be comprised generally of non-
management directors, a majority of whom should be unrelated directors.
The following is a description of the Committees of the Board of Directors
and their mandate:
- Audit Committee
The Audit Committee is presently composed of four directors, being L.
Robbie Shaw, Gordon R. Cunningham J. Spencer Lanthier and Thomas E. Costello,
all of whom are non-management directors and all of whom are unrelated
directors, as such term is understood in reference to the Guidelines. The
Audit Committee met 7 times during the period from January 1, 2004 to December
31, 2004. Following the Meeting, J. Spencer Lanthier will no longer serve on
the Audit Committee given that he is not standing to be re-elected as a
director. The directors of the Corporation will propose that John E.
Richardson be appointed to the Audit Committee. Amongst his broad corporate
and financial expertise, Mr. Richardson has been a C.A. since 1957, was a
senior partner of Clarkson Gordon & Co. (now Ernst & Young) from 1965 to
1986 and was made a fellow of the Ontario Institute of Chartered Accountants
in 1982.
The basic mandate of the Audit Committee is to review the annual financial
statements of the Corporation and to make recommendations to the Board of
Directors in respect thereto. Further, the Committee reviews the nature and
scope of the annual audit as proposed by the external auditors and management
and, with the external auditors and management, the adequacy of the internal
accounting control procedures and systems within the Corporation.
During 2002, the Audit Committee formalized its mandate into a written
charter document. The charter sets out that, in addition to its basic mandate,
the Audit Committee will, on a going-forward basis, have the sole authority
to recommend to the Corporation's shareholders the appointment or replacement
of the Corporation's external auditors and shall approve all audit engagement
fees and terms and all significant non-audit engagements with the external
auditors. Further, the Audit Committee will require that the Corporation's
external auditors provide a report at least annually regarding, inter alia,
the auditors' internal quality-control procedures and all relationships
between the external auditors and the Corporation. While the Audit Committee
may consult with management on these issues, it shall not delegate its overall
responsibility. The charter also sets out that the Audit Committee shall have
the authority, to the extent it deems necessary or appropriate, to retain
special legal, accounting or other consultants for additional advice as may be
required.
- Compensation Committee
The Compensation Committee is presently composed of four directors, being
Ben J. Davenport, Jr., Michael L. Richards, L. Robbie Shaw and Gordon R.
Cunningham. The Compensation Committee met 3 times during the period from
January 1, 2004 to December 31, 2004. As aforementioned on the previous page,
Michael L. Richards is considered to be a related director. Nonetheless, given
Mr. Richards' broad business experience, the Corporation feels he should
continue to serve on the Compensation Committee.
The mandate of the Compensation Committee was described above under the
heading "Report on Executive Compensation".
- Nominating & Governance Committee
The Nominating & Governance Committee is composed of all of the current
members of the Board, a majority of whom are unrelated directors. The charter
of the Nominating & Governance Committee sets out that the committee will,
inter alia:
(i) assess on an annual basis the effectiveness of the Board as a whole
as well as periodically evaluate the contribution of individual
members of the Board;
(ii) review, on a periodic basis, the size and composition of the Board
and ensure that an appropriate number of unrelated directors sit on
the Board;
(iii) identify individuals qualified to become members of the Board as
may be required and recommend to the Board new nominees for
appointment;
(iv) provide appropriate orientation to any new members of the Board;
(v) recommend to the Board corporate governance guidelines and ensure
the sufficiency of such guidelines on a periodic basis; and
(vi) review and advise the Board at least annually as to corporate
governance issues.
____________________________________________________________________________
[BOLDED]
The board of directors of every corporation should appoint a committee of
directors composed exclusively of non-management directors, a majority of whom
are unrelated directors, with the responsibility for proposing to the full
board new nominees to the board and for assessing directors on an ongoing basis.
____________________________________________________________________________
As aforementioned, this responsibility has been undertaken by the
Nominating & Governance Committee of the Board, a majority of whom are
unrelated directors, but one of whom is a member of management.
____________________________________________________________________________
[BOLDED]
Every board of directors should implement a process to be carried out by the
nominating committee or other appropriate committee for assessing the
effectiveness of the board as a whole, the committees of the board and the
contribution of individual directors.
____________________________________________________________________________
As aforementioned, this responsibility has been undertaken by the
Nominating & Governance Committee of the Board.
____________________________________________________________________________
[BOLDED]
Every corporation, as an integral element of the process for appointing new
directors, should provide an orientation and education program for new recruits
to the board. In addition, every corporation should provide continuing education
for all directors.
____________________________________________________________________________
As aforementioned, this responsibility has been undertaken by the
Nominating & Governance Committee of the Board.
____________________________________________________________________________
[BOLDED]
Every board of directors should examine its size and composition and undertake,
where appropriate, a program to establish a board comprised of members who
facilitate effective decision-making.
____________________________________________________________________________
As aforementioned, this responsibility has been undertaken by the
Nominating & Governance Committee of the Board.
____________________________________________________________________________
[BOLDED]
A committee of the board of directors comprised solely of unrelated directors
should review the adequacy and form of the compensation of senior management and
directors, with such compensation realistically reflecting the responsibilities
and risks of such positions.
____________________________________________________________________________
This responsibility forms part of the mandate of the Compensation
Committee, as described above under the heading "Report on Executive
Compensation".
____________________________________________________________________________
[BOLDED]
Every board of directors should expressly assume responsibility for, or assign
to a committee of directors the general responsibility for, developing the
corporation's approach to governance issues. This committee would, among other
things, be responsible for the Corporation's response to these governance
guidelines.
____________________________________________________________________________
As aforementioned, this responsibility has been undertaken by the
Nominating & Governance Committee of the Board.
____________________________________________________________________________
[BOLDED]
The board of directors, together with the CEO, should develop position
descriptions for the board and for the CEO, involving the definition of the
limits to management's responsibilities. In addition, the board should approve
or develop the corporate objectives which the CEO is responsible for meeting
and assess the CEO against these objectives.
____________________________________________________________________________
The Corporation established written corporate governance guidelines to
address the above issues. Such guidelines do not contain formalized position
descriptions for the Board and for the CEO, nor do they set out specific
objectives which the CEO is responsible for meeting. The Board is of the view
that due to its relatively small size, the need for these formalities is
diminished because effective communication between the Board and management of
the Corporation is otherwise achieved. That being said, the Compensation
Committee conducts an annual review of the CEO's performance in order to ensure
that the CEO is providing the best leadership for the Corporation in the long
and short term.
____________________________________________________________________________
[BOLDED]
The audit committee should be composed only of unrelated directors. All of the
members of the audit committee should be financially literate and at least one
member should have accounting or related financial experience. The audit
committee should have direct communication channels with the internal and
external auditors to discuss and review specific issues as appropriate. The
audit committee duties should include oversight responsibility for management
reporting on internal control.
____________________________________________________________________________
The Audit Committee of the Corporation, as described previously, meets all
of the above criteria.
____________________________________________________________________________
[BOLDED]
Every board of directors should implement structures and procedures that ensure
that the board can function independently of management. The board of directors
should implement a system which enables an individual director to engage an
external adviser at the expense of the Corporation in appropriate circumstances.
The engagement of the external adviser should be subject to the approval of an
appropriate committee of the board.
____________________________________________________________________________
Non-management directors meet at least quarterly. Further, the Board and
the Audit Committee have the power to hire independent legal, financial or other
advisors as they may deem necessary, without consulting or obtaining the
approval of any officer of the Corporation in advance.
____________________________________________________________________________
[BOLDED]
Corporations should have a formalized process in order to communicate as
required with shareholders and in order to address their feedback and queries.
____________________________________________________________________________
The fundamental objective of the Corporation's shareholder communication
policy is to ensure an open, accessible and timely exchange of information with
all shareholders respecting the business, affairs and performance of the
Corporation, subject to the requirements of securities legislation in effect
and other statutory and contractual obligations limiting the disclosure of
such information. In order to facilitate the effective and timely dissemination
of information to all of its shareholders, the Corporation releases its
disclosed information through news wire services, the general media, telephone
conferences with investment analysts and mailings to shareholders.
ADDITIONAL INFORMATION
Additional financial information is provided in the Corporation's
Consolidated Financial Statements and Management's Discussion and Analysis for
the fiscal year ended December 31, 2004. All of this information, as well as
additional information relating to the Corporation is available on the System
for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on
EDGAR at www.sec.gov. Shareholders may also contact the Corporation to request
copies of the Corporation's Consolidated Financial Statements and Management's
Discussion and Analysis by contacting Investor Relations at 866-202-4713 or by
e-mail to itp$info@itape.com.
APPROVAL OF DIRECTORS
The contents and the sending of this Circular have been approved by the
directors of the Corporation.
(signed) Andrew M. Archibald, C.A.
Chief Financial Officer and Secretary
Montreal, Quebec - April 25, 2005
INTERTAPE POLYMER GROUP INC.
PROXY
The Management of the Corporation Solicits this Proxy
The undersigned shareholder of INTERTAPE POLYMER GROUP INC. (the
"Corporation") hereby appoints Melbourne F. Yull, failing whom, Michael L.
Richards, or instead of the foregoing,____________________________________
__________________________________________________________________________
as the proxyholder of the undersigned to attend and act for and on behalf of
the undersigned at the Annual and Special Meeting of Shareholders of the
Corporation to be held on May 25, 2005, and at any adjournment thereof to the
same extent and with the same power as if the undersigned were present in
person thereat and with authority to vote and act in the said proxyholder's
discretion with respect to amendments or variations to matters referred to in
the notice of the Meeting and with respect to other matters which may properly
come before the Meeting. This proxy is solicited by and on behalf of the
Management of the Corporation.
The said proxyholder is specifically directed to vote or withhold from voting
the shares registered in the name of the undersigned as indicated below:
(1) ELECTION OF DIRECTORS
____ FOR all nominees listed below as a group (except as marked to the
contrary below)
____ WITHHOLD AUTHORITY to vote for all nominees listed below as a group
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Melbourne F. Yull, Michael L. Richards, Ben J. Davenport, Jr., L. Robbie Shaw,
Gordon R. Cunningham, Thomas E. Costello, John E. Richardson, Jorge N. Quintas.
(2) VOTE FOR ___ WITHHOLD FROM VOTING ___ in respect of the appointment of
Raymond Chabot Grant Thornton as auditors of the Corporation and authorizing
the directors to fix their remuneration.
Date:_________________________________
Signature_____________________________
Notes:
(1) This form of proxy must be executed by the shareholder or his attorney
authorized in writing or, if the shareholder is a corporation, under the
corporate seal or by an officer or attorney thereof duly authorized. Joint
holders should each sign. Executors, administrators, trustees, etc., should so
indicate when signing. If undated, this proxy is deemed to bear the date it
was mailed to the shareholder.
(2) A shareholder may appoint as proxyholder a person (who need not be a
shareholder) other than the persons designated in this form of proxy to attend
and act on his behalf at the Meeting by inserting the name of such other
person in the space provided or by completing another proper form of proxy.
(3) The shares represented by this proxy will, on a show of hand or any
ballot that may be called for, be voted or withheld from voting in accordance
with the instructions given by the shareholder; in the absence of any contrary
instructions, this proxy will be voted "FOR" the itemized matters.
PROXY
Please complete and return in the envelope provided.
FORMULAIRE DE PROCURATION
Veuillez completer et poster dans l'enveloppe ci-jointe.